bunge north america flat price risk - · pdf file2/19/2014 1 bunge north america virginia...

2/19/2014

1

Bunge North AmericaVirginia State Feed Association ConferenceAnd Nutritional Management “Cow” College

February 2014

11 JANUARY 2012 1

Foreign Currency

Commercials/Funds(Boards of Trade)

Freight

Flat Price Risk

2

World MarketSupply/Demand

Price

Weather / Crops

Political Events

Cost / Margin Structure

Local Supply/Demand

Extreme Events

Highlights of the Past 12 Months

Correction of 2012 US Drought

Exceptionally late US Spring Planting

Extremely tight corn and soybean September 1 ending stocks

Record US corn crop

Record South American soybean crop 2014

Near record US soybean crop 2014

3

Near record US soybean crop 2014

PEDv outbreak

Chinese bird flu

Record US stock prices

Re-election of Cristina in Argentina

US Weather

4

2014 Virginia State Feed Association & Nutritional Management "Cow" College

Graves | BUNGE

2/19/2014

2

5

Snow Depth

6

US Drought Monitor

7

US 6 – 10 Day Outlook

8


Graves | BUNGE

2/19/2014

3

US 11 – 15 Day Outlook

9

US - January

10

US – Soil Moisture

11

World Crop Story

12


Graves | BUNGE

2/19/2014

4

US Commodities- Henry Graves

13

US Expected Margins, Net Variable Costs

400

500

600

700

800

/acr

e

USDA Planting Intentions Report March 31. 2014

14

0

100

200

300

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

$/

Corn Soybeans HRS Cotton Sorghum SRW+dcsb

US TOTAL PLANTED ACREAGE SUMMARY (1,000 Acres)

2010 2011 2012 20132014 Trade Range Low

2014 Trade Range High

Hay Harvested 59,872 55,633 55,653 56,260 Winter Wheat Planted 37,335 40,646 41,324 43,090

Durum 2,560 1,369 2,123 1,470Other Sprg Wht 13,698 12,394 12,289 11,596All Spring wheat 16,258 13,763 14,412 13,066

Corn 88,192 91,921 97,155 95,365 90,000 94,000 Sorghum 5,404 5,481 6,244 8,061Barley 2,872 2,559 3,637 3,480Oats Planted 3,138 2,496 2,760 3,010Rye 1,211 1,266 1,300 1,446

Soybean 77,404 74,976 77,198 76,533 78,000 83,000 Cotton 10,974 14,735 12,315 10,407Rice 3,636 2,689 2,699 2,489Sunflowers Planted 1,952 1,544 1,919 1,576

15

Canola (Rapeseed) 1,449 1,072 1,765 1,348Flaxseed 421 178 344 181Beans, Dry Edible All 1,911 1,205 1,743 1,355Peas, Dry Edible All 756 362 649 860

Total Spring Planted 215,578 214,247 224,140 219,176 Low Corn High Corn

Total Wheat (Wntr+Sprng+Drm) 53,603 54,409 55,736 56,156 High Beans Low Beans

Corn + Soybeans Planted 165,596 166,897 174,353 171,898 173,000 172,000

% Beans (of Corn + Sbeans) 46.8% 44.9% 44.3% 44.5% 48.0% 45.3%

Dble Crop Soybeans 2,471 4,774 4,777 6,782

CRP Total 33,721 31,298 29,526 26,838

Prevent Plant 5,316 9,750 1,327 9,419

Spring +WW+Hay+CRP+Prevent-DC SB 351,822 351,574 351,970 354,783

Spring +WW+Hay+Prevent-DC SB 318,101 320,276 322,444 327,945

Corn + Soybeans + Wheat 219,199 221,306 230,089 228,054

World Corn, Soybean, and Wheat Harvested Acreage (Mln HA)

159 159 164171 176 177

112

224 225217 221 216 220

16

Source: USDA

96 102 103 103 109 112

2008/2009 2009/2010 2010/2011 2011/2012 2012/2013 2013/2014

Corn Soybean Wheat


Graves | BUNGE

2/19/2014

5

US Corn, Soybean, and Wheat Harvested Acreage (Mln Acres)

79 79 8184

87 87

75 76 7774 76 76

5650 48 46

4945

17

Source: USDA

2008/2009 2009/2010 2010/2011 2011/2012 2012/2013 2013/2014

Corn Soybean Wheat

March Corn

18

2/19 $4.50

US Corn S&D

CORN - US BALANCEmln bushels SEP/AUG

08/09 09/10 10/11 11/12 12/13 13/14Planted Acres (Mln Acres) 86.0 86.4 88.2 91.9 97.2 95.3Harvested Acres 78.6 79.5 81.4 84.0 87.4 87.2Percent Harvested 91% 92% 92% 91% 90% 92%Yield Bu/Acre 153.9 164.7 152.8 147.2 123.4 160.4

Beg. Stocks 1,624 1,673 1,708 1,128 989 824 Production 12,092 13,092 12,447 12,360 10,780 13,989 Imports 14 8 28 29 162 30

19

Source: USDA

Total Supply 13,729 14,774 14,182 13,517 11,931 14,843

FSI 5,025 5,961 6,426 6,439 6,044 6,400 FSI for Fuel 3,709 4,591 5,019 5,011 4,648 4,950

FSI not for fuel 1,316 1,370 1,407 1,428 1,396 1,450 Feed and Residual 5,182 5,125 4,795 4,545 4,333 5,200 Exports 1,849 1,980 1,834 1,543 731 1,450 Total Use 12,056 13,066 13,055 12,527 11,108 13,050

Ending Stocks 1,673 1,708 1,128 989 824 1,792 Stocks to use% 13.9% 13.1% 8.6% 7.9% 7.4% 13.7%

Stocks in Days of use 51 48 32 29 27 50

US Corn Production (MMT)

300

282

268

331

307

333

316 314

274

355

20

Source: USDA

241

228

256268


Graves | BUNGE

2/19/2014

6

US Corn Use for Ethanol (BBU)

3.05

3.71

4.59

5.02 5.01

4.654.95

21

Source: USDA

1.321.60

2.12

04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14

March Soybeans

2/19 $13.61

22

US Soybeans S&D

SOYBEANS - US BALANCEMln bushels SEP/AUG

08/09 09/10 10/11 11/12 12/13 13/14Planted Acres (Mln Acres) 75.7 77.5 77.4 75.0 77.2 76.5Harvested Acres 74.7 76.4 76.6 73.8 76.2 75.9Percent Harvested 98.7% 98.5% 99.0% 98.4% 98.7% 99.2%Yield Bu/Acre 39.7 44.0 43.5 41.9 39.8 43.3

Beg. Stocks 205 138 151 215 169 141 Production 2,967 3,359 3,329 3,094 3,034 3,289 Imports 13 15 14 16 36 30

23

Source: USDA

Imports 13 15 14 16 36 30 Total Supply 3,185 3,512 3,495 3,325 3,239 3,460

Crush 1,662 1,752 1,648 1,703 1,689 1,700 Feed, Seed & Residual 106 110 130 91 90 99 Domestic Use 1,768 1,862 1,778 1,794 1,779 1,799 Exports 1,279 1,499 1,501 1,362 1,320 1,510 Total Use 3,047 3,361 3,280 3,155 3,099 3,309

Ending Stocks 138 151 215 169 141 150 Stocks to use% 4.5% 4.5% 6.6% 5.4% 4.5% 4.5%


March Soymeal

2/19 $459.00

24


Graves | BUNGE

2/19/2014

7

US Soymeal S&D

SOYBEAN MEAL - US BALANCET Short tons OCT/SEP

08/09 09/10 10/11 11/12 12/13 13/14Beg. Stocks 294 235 302 350 300 275 Production 39,102 41,707 39,251 41,025 39,875 40,360 Yield 47.05 47.61 48.07 47.90 47.56 47.48

Imports 88 160 179 216 245 165 Total Supply 39 484 42 101 39 731 41 591 40 420 40 800

25

Source: USDA

Total Supply 39,484 42,101 39,731 41,591 40,420 40,800

Exports 8,497 11,160 9,081 9,741 11,114 10,900 Domestic 30,752 30,640 30,301 31,550 29,031 29,600 Total Use 39,249 41,800 39,381 41,291 40,145 40,500

End. Stocks 235 302 350 300 275 300 Stocks to Use % 0.6% 0.7% 0.9% 0.7% 0.7% 0.7%


March Soyoil

26

2/19 $.4010

US Soyoil S&D

SOYBEAN OIL - US BALANCE

Mln lbs OCT/SEP08/09 09/10 10/11 11/12 12/13 13/14

Beg. Stocks 2,485 2,861 3,406 2,425 2,540 1,705 Production 18,745 19,615 18,888 19,740 19,820 19,840 Yield 11.28 11.20 11.57 11.52 11.82 11.67

Imports 90 103 159 149 196 200 Total Supply 21,319 22,578 22,453 22,314 22,556 21,745

27

Source: USDA

Exports 2,193 3,359 3,233 1,464 2,164 1,450 Non Biodiesel Domestic Use 14,244 14,134 14,245 13,440 14,069 13,350 Biodiesel Use 2,021 1,680 2,550 4,870 4,617 5,200 Domestic DisappearanceTotal Use 18,459 19,173 20,028 19,774 20,851 20,000

End. Stocks 2,861 3,406 2,425 2,540 1,705 1,745 Stocks to Use % 15.5% 17.8% 12.1% 12.8% 8.2% 8.7%


US Wheat S&D (MBU)

WHEAT - US BALANCEMln bushels JUN/MAY

08/09 09/10 10/11 11/12 12/13 13/14Planted Acres (Mln Acres) 63.2 59.2 53.6 54.4 55.7 56.2Harvested Acres 55.7 49.9 47.6 45.7 48.9 45.2Percent Harvested 88% 84% 89% 84% 88% 80%Yield Bu/Acre 44.9 44.5 46.3 43.7 46.3 47.2

Beg. Stocks 306 656 976 863 743 718Production 2,499 2,218 2,207 1,999 2,266 2,130

28

Source: USDA

Imports 127 119 97 112 123 160Total Supply 2,932 2,993 3,279 2,974 3,132 3,008

FSI 1,005 988 997 1,018 1,018 1,024 Feed and Residual 255 150 132 162 388 250 Exports 1,015 879 1,289 1,051 1,007 1,125 Total Use 2,275 2,018 2,417 2,231 2,413 2,399

Ending Stocks 656 976 862 743 718 608 Stocks to use% 28.9% 48.4% 35.7% 33.3% 29.8% 25.3%



Graves | BUNGE

2/19/2014

8

March Hard Red Winter Wheat

29

World and South America Commodity Outlook - Bobby Ewalt

30

South American Logistics

31

China Soybean Imports Oct/Sep (MMT)

29

3841

50 52

59 60

69

40

50

60

70

80

ort

s (

MM

T)

Brazil – 32 mmt US – 26 mmt ARG – 7 mmt Rest - 4 mmt

32

Source: USDA

2628 29

0

10

20

30

Imp


Graves | BUNGE

2/19/2014

9

US Vessel Shipment /

Lineup To China

33

Soybeans Major Origins Production (MMT)

91 91

84

8390

215 215

191

214

234

34

Source: USDA

55 49 40 49 54

69 7567

8290

09/10 10/11 11/12 12/13 13/14

Argentina Brazil United States

World Soymeal Consumption Oct/Sep (MMT)

153

161

171177 177

186

1%

2%

3%

4%

5%

6%

7%

160

180

200

35

Source: USDA

-4%

-3%

-2%

-1%

0%

1%

100

120

140

08/09 09/10 10/11 11/12 12/13 13/14

World Soymeal Consumption % Growth

Brazil Weather

36


Graves | BUNGE

2/19/2014

10

Brazil – Forecasted Harvest Pace

37

Bean vessel loading ahead of normal pace with reduced line up congestion.

Brazil Soybeans S&D

SOYBEAN - BRAZIL BALANCE1000's MTOct/Sep 08/09 09/10 10/11 11/12 12/13 13/14HARVESTED Area 1000 Hectares 21,700 23,500 24,200 25,000 27,700 29,500YIELD mt/hectares 2.66 2.94 3.11 2.66 2.96 3.05

Beginning Stocks 20,246 13,434 17,480 23,636 12,916 15,927Production 57,800 69,000 75,300 66,500 82,000 90,000Imports 44 174 37 128 395 150

38

Source: USDA

pTOTAL SUPPLY 78,090 82,608 92,817 90,264 95,311 106,077

FSR 2,800 2,850 2,900 2,950 3,000 3,102Exports 29,987 28,578 29,951 36,315 41,904 45,000Crush 31,869 33,700 36,330 38,083 34,480 37,275TOTAL DISAPPEARANCE 64,656 65,128 69,181 77,348 79,384 85,377

CARRY OUT 13,434 17,480 23,636 12,916 15,927 20,700Stocks to Use 21% 27% 34% 17% 20% 24%Stocks Express in Days of Use 76 98 125 61 73 89

Brazil Soybean Exports by Destination (TMT), Oct/Sep

1,802

1,691

1,113

959 649 515

325

3,464

2012/2013

586

0

1 6,470

2008/2009

39

31,377

China Spain NetherlandsTaiwan Thailand JapanVietnam United States Other

Total Exports = 41.9 MMT

16,193

2,636

2,352

568

1,180


Argentina Weather

40


Graves | BUNGE

2/19/2014

11

Argentina Soybeans S&D

SOYBEAN - ARGENTINA BALANCE1000's MTOct/Sep 08/09 09/10 10/11 11/12 12/13 13/14HARVESTED Area 1000 Hectares 16,000 18,600 18,300 17,577 19,400 20,000YIELD mt/hectares 2.00 2.93 2.68 2.28 2.54 2.70

Beginning Stocks 20,945 15,633 21,039 21,403 16,389 22,404Production 32,000 54,500 49,000 40,100 49,300 54,000Imports 1,241 1 13 0 2 2

41

Source: USDA

pTOTAL SUPPLY 54,186 70,134 70,052 61,503 65,691 76,406

FSR 1,720 1,880 1,830 1,860 1,940 2,000Exports 5,590 13,088 9,205 7,368 7,738 8,000Crush 31,243 34,127 37,614 35,886 33,609 36,600TOTAL DISAPPEARANCE 38,553 49,095 48,649 45,114 43,287 46,600

CARRY OUT 15,633 21,039 21,403 16,389 22,404 29,806Stocks to Use 41% 43% 44% 36% 52% 64%Stocks Express in Days of Use 148 157 161 133 189 234

Argentina Soymeal Exports by Destination (TMT), Oct/Sep

1383

2571

1107

885

688

8712

2532

1659

1594

8850

2012/20132008/2009

42

688

1617

87020791091

2441

1377

1277

1243

107310551030

991982

Indonesia Netherlands Vietnam ThailandAlgeria United Kingdom Malaysia ItalyIran Poland Spain Other

Total Exports = 24.0 MMT Total Exports = 23.7 MMT

Argentina Soybean Exports by Destination (TMT), Oct/Sep

550

201146

14010

631

2012/2013

194

5171

109 9843

2008/2009

43

6026

China Egypt BangladeshTurkey Thailand United StatesOther


4312


South American Corn

44


Graves | BUNGE

2/19/2014

12

Major Origins Corn Production (MMT)

5670

1625 25 21

27

26166164 177 193

206

2111110 12

23 21

30

6559 58

6859

65

616647 646

692667

757

45

Source: USDA

307 333 316 314274

355

5156 57 73

81

16 27

08/09 09/10 10/11 11/12 12/13 13/14

US Brazil Argentina China Ukraine EU-27

Brazil Corn S&D

CORN - BRAZIL BALANCEmln mt - MAR/FEB

08/09 09/10 10/11 11/12 12/13 13/14Harvested Area 14.10 12.93 13.80 15.20 15.80 15.00Yield mt/ha 3.62 4.34 4.16 4.80 5.13 4.67

Beg. Stocks 12.6 12.1 10.0 10.3 9.2 16.0 Production 51.0 56.1 57.4 73.0 81.0 70.0 Imports 1.1 0.4 0.8 0.8 0.8 0.8 T t l S l 64 7 68 6 68 2 84 0 91 0 86 8

46

Total Supply 64.7 68.6 68.2 84.0 91.0 86.8

FSI 7.0 7.0 7.0 7.5 8.0 9.0 Feed and Residual 38.5 40.0 42.5 43.0 45.0 46.0 Exports 7.1 11.6 8.4 24.3 22.0 20.0 Total Use 52.6 58.6 57.9 74.8 75.0 75.0

Ending Stocks 12.1 10.0 10.3 9.2 16.0 11.8 Stocks to use% 23.0% 17.0% 17.7% 12.3% 21.3% 15.7%


Source: USDA

Brazil Corn Exports by Destination, Mar/Feb

4,107

3,979853

696

650

4,275

2011/2012

615

66960

3830

281

2007/2008

47

3,058

2,200

2,190

1,277

1,028

Japan Korea SouthIran EgyptTaiwan United StatesMorocco Saudi ArabiaDominican Republic MalaysiaOther

512

587

4,629

Total Exports = 7.7 MMT Total Exports = 24.3 MMT

Argentina Corn S&D

CORN - ARGENTINA BALANCEmln mt - MAR/FEB

08/09 09/10 10/11 11/12 12/13 13/14Harvested Area 2.50 3.00 3.75 3.60 4.00 3.45Yield mt/ha 6.20 8.33 6.72 5.83 6.63 7.54

Beg. Stocks 2.2 1.0 2.6 4.1 1.0 0.9 Production 15.5 25.0 25.2 21.0 26.5 26.0 Imports 0.0 0.0 0.0 0.0 0.0 0.0 Total Supply 17.7 26.0 27.8 25.1 27.5 26.9

48

Total Supply 17.7 26.0 27.8 25.1 27.5 26.9

FSI 1.9 1.9 2.0 2.2 2.6 3.0 Feed and Residual 4.5 5.0 5.3 4.8 5.0 5.0 Exports 10.3 16.5 16.3 17.1 19.0 18.0 Total Use 16.7 23.4 23.6 24.1 26.6 26.0

Ending Stocks 1.0 2.6 4.1 1.0 0.9 0.9 Stocks to use% 5.8% 11.0% 17.5% 4.1% 3.4% 3.5%


Source: USDA


Graves | BUNGE

2/19/2014

13

Argentina Corn Exports by Destination, Mar/Feb

2372

2311

67

4385

2011/2012338

1180 0

1123224

1234

2007/2008

49

1428

1223

1193990857

803

758

71367

Colombia Algeria Korea SouthPeru Malaysia EgyptSaudi Arabia Morocco JapanTaiwan United States Other

626

970

90

12

8954

Total Exports = 14.7 MMTTotal Exports = 17.1 MMT

Livestock

50

Dairy Herd and Milk Production

51

Milk production during 2013 was 0.4% above 2012 production due to increased milk per cow

Average 2013 dairy cow herd size was down 0.1% from the average 2012 herd

Dairy Product Prices Rally

52

Despite higher production, milk prices have rallied, increasing 14.7% from July to Dec

Product prices continue to increase — cheese, butter, and non-fat dry milk prices went up 10.4%, 10.7%, and 13.4% respectively from July to Dec


Graves | BUNGE

2/19/2014

14

Dairy Price Ratios and Slaughter

53

Milk to feed price ratio has greatly improved with lower feed costs and higher milk prices — this December’s milk/feed price ratio was the highest December ratio since 2009

Dairy slaughter during 2013 was 0.5% above slaughter in 2012—slaughter during the first two weeks this year has been down 10.2% from the same time last year

Cattle on Feed Below Last Year

54

Lower feed costs and record high cattle prices encouraged feedlots to stay aggressive in placements

Cattle on feed inventories continue to be below last year

Record Cattle Prices, Lower Slaughter

55

Texas steer price at record levels — approaching $150 per cwt

Lower cattle supplies have kept slaughter in check — down 3.9% so far this year from the same time last year

Chicken Prices and Margins

56

Broiler cutout prices this year have been near $80 per cwt, 10.2% below the same time last year

Despite the lower cutout values compared to last year, lower feed costs have kept margins at break even, the same as last year


Graves | BUNGE

2/19/2014

15

Eggs Set and Weights Above Year Ago

57

Eggs set for the first three weeks in January averaged 2.1% above the same time last year

Weights continue to push higher, up 0.5% from the same time last year

PEDv Cases by State

58

Total Reported Cases so far

Date of First Reported Case

PEDv Impact

59

Cases continue to spike across the nation—total cases increased 28% in the last four weeks ending 1/19

The USDA has started to reflect the impact of PEDv on sow production, recording the lowest pig per litter growth since the summer of 2003

Greatest PEDv Impact Yet to Come

60

Year to date hog slaughter has been equal with the same time last year

Pork production this year is up 2.6% from last year as producers feed hogs to heavier weights


Graves | BUNGE

2/19/2014

16

Hog Profitability and Weights

61

Spot producer margins are near $5 per head—average expected margin for 2014 is over $30 per hear (based on futures)

Producers look to take advantage of profitable margins by selling larger animals

Conclusions

Soybean Complex will be volatile 2014

Corn price outlook has more bearish opportunities due to PEDv

SA weather is needed to finish their 2014 crop

US weather for 2014 growing season critical

World Political Stability

SA politics

62

SA politics

China China China

Follow Current Market Updates at tweet accounts #SteveBirdnest or #DaveLongBigMill or Instagram#BMasonTurkey


Graves | BUNGE

bunge north america flat price risk - · pdf file2/19/2014 1 bunge north america virginia...

Documents